Introduction
The explosive export of PVC powder and its related products in the past two years may make up for the weak domestic demand at the demand side. According to the brief analysis of macroeconomic, real estate and export trends in the United States, it is expected that the export volume of PVC powder and floor covering products will fall to different degrees in 2023 compared with the same period last year, and the demand side support for exports will gradually weaken.
Report body
one
Introduction to overseas PVC production capacity pattern and global trade flow
From the perspective of global PVC production capacity pattern, the growth rate of production capacity in the past five years is 2.59%, and it is expected that the production capacity will reach 63 million tons/year by 2023. From the perspective of regions, the proportion of production capacity in Northeast Asia remains around 50%, with China's production capacity accounting for the main proportion; North America and Europe ranked second and third in terms of capacity, accounting for about 30% of total capacity.
The regional concentration of production capacity is also reflected in the trade flow. In recent years, the global trade capacity has continued to exceed 9 million tons/year, and the largest net export regions are North America, Northeast Asia and Western Europe in turn; The main import regions are India, the Middle East, Southeast Asia, Africa and Northeast Asia. The United States is the world's largest exporter of shale gas because of its advantages in shale gas and its low cost. The export volume of PVC from the United States accounts for more than 30% of the global trade volume, and the source of goods mainly flows to Central and South America, Europe, Africa and some Asian regions. Chinese Mainland and Taiwan are also major export destinations, accounting for more than 20% of international trade volume. Chinese Mainland's supply of goods mainly flows to Central Asia, Southeast Asia, India and Russia. Taiwan, China's supply of goods mainly flows to Chinese Mainland, Southeast Asia, India and other places, while South Korea, Japan, Europe and Southeast Asia's supply of goods also partially flows to Chinese Mainland.
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PVC powder export analysis and prospect in 2023
In recent years, China's import and export pattern has changed significantly, with the watershed from 2020 to 2021 as the transition from a net importer to a net exporter of PVC; In terms of volume, the average net export from 2018 to 2020 is about 200000 tons/year, which has limited impact on the domestic output of nearly 20 million tons/year. The share of PVC import and export has increased sharply since the 21st year, with the average net export volume of more than 1.4 million tons/year from 2021 to 2022. From the perspective of countries, China's PVC powder was mainly exported to Southeast Asia by November 2022; India, which accounts for 28%, is still the main exporter; The proportion of exports to Vietnam increased on a month-on-month basis.
From the perspective of the current situation of India, the main exporter of PVC, India is the largest importer of PVC powder in the world. Due to the rapid growth of PVC demand in the Indian market in recent years, it is difficult to cover the new demand due to the lack of production capacity. As of 2022, India's production capacity will remain at 1.61 million tons, and its output will basically remain at 1.4 million tons. Therefore, the increase in India's demand will mainly be filled by increasing imports. From the perspective of India's main import source countries in 2022, it is mainly Japan and South Korea, Chinese Mainland, Taiwan, China and other Asian countries. Due to the expiration and termination of the anti-dumping duty against China in 22 years, the proportion of Chinese goods may exceed 35%. However, it is reported that the Indian government launched an investigation into the safeguard measures for imported PVC under the application of two PVC producers in India in September 22. In the short term, the survey has not restricted China's PVC export to India. However, it is not ruled out that this investigation will become a precursor to the issuance of a new round of anti-dumping duties in India in the future.
Whether the market demand in India (Asia) is released or not plays an obvious driving role in China's PVC powder export signing and price stimulation. Taking the market in the latter part of November 2022 as an example, according to information company information, with the improvement of domestic macro expectations, Indian merchants judged that the bottom of China's PVC periodic price had been reached, and the demand for short-term speculative stock increased, which led to the increase of China's export volume and price. However, in the medium and long term, the net export of PVC in China is expected to decline year on year in 2023, and the support of import and export ends will weaken; We think there are two reasons.
From a macro perspective, in the face of high inflation pressure in the world in 2022, the Federal Reserve began to raise interest rates for seven consecutive times in March, and the central banks of major overseas economies tightened liquidity. Although the Federal Reserve slowed the pace of interest rate increase at the December interest rate meeting, it is expected that it will continue to raise interest rates slowly for a period of time in 2023 and then raise interest rates to around 5% - 5.25%. At that time, global economies will face further downside risks. According to the IMF's latest GDP growth forecast, the global GDP growth rate in 2023 will be 2.7%, lower than the previous value of 3.2%. India was 6.06%, lower than the previous value. In 2023, the slowdown of overseas economic growth and the contraction of demand caused by recession will restrict the export of PVC powder in China.
From the perspective of competition, the U.S. export source will maintain its impact on the Asian market in 2023. Due to the weakening domestic demand for PVC in the United States and the high inventory, there are many enterprises that need to release pressure from export, and the low production cost of PVC in the United States, there are not a few cases that seize the share of Asian demand through price advantage. In November, 2022, the delivery price of American goods in January, 23 was 720-730 US dollars/ton CFR India, which was nearly 100 US dollars lower than the spot price at that time, suppressing the overall Asian market price, and even leading to the opening of China's short-term import window. According to statistics, the export of PVC powder from the United States in 2022 or more than 2 million tons, combined with the current trend of decline in the United States and the high social inventory on a year-on-year basis, is expected to increase further in 2023.
To sum up, under the background that the global economic growth slows down and the demand weakens and the Asian market will also face the impact of the low price supply from the United States, the overall focus of the monthly net export of PVC in 2023 will move down to near the level of November 22, and the annual net export volume will probably be around 800~1 million tons, down 30% year on year.
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Analysis on the export of PVC floor covering products and its prospect in 2023
From 2018 to 2021, the average annual growth rate of PVC flooring products exports was more than 10%; In 2022, the export growth of floor covering products will slow down. By November 2022, China's cumulative export of PVC floor covering products will reach 4.7 million tons. It is estimated that the annual export will be around 5~5.1 million tons, and the annual export growth rate will decline to 0%. From the perspective of the proportion of flooring products exporting countries, it is mainly developed countries in Europe and the United States, with Europe accounting for 10-20% and the United States accounting for around 55% - 60%.
The reason why floor coverings are mainly sold to the United States is that in the concept of decoration in European and American countries, the floor has more attributes of consumer goods, and the replacement frequency is relatively high. Residents often choose to replace the floor because of the replacement of rental houses or the change of house decoration style. However, the domestic production capacity of PVC flooring in the United States is limited, and its required PVC flooring is heavily dependent on imports, and Chinese PVC flooring has price advantages, so the proportion of Chinese PVC flooring products exported to the United States is the largest.
From the perspective of the combination of floor paving products and real estate data of the United States, there is a certain correlation between the two, especially after 20 years, the cumulative year-on-year data trend of the two is strong. Therefore, from the perspective of real estate demand in the United States, the export of floor coverings can be predicted prospectively. Looking forward to 2023, it is expected that the export volume of paving products will decline further.
On the one hand, on the macro level, the US real estate data accelerated the decline in November, and the sales of new houses were adjusted by 46000 units, with a year-on-year growth rate of - 15.3%, 5.5 percentage points higher than that in October, and the year-on-year growth rate has been negative for nine consecutive months. In November, the sales of completed houses reached 4.09 million, with the year-on-year growth rate falling to - 35.4%. The average interest rate of the US 30-year housing loan has risen from about 3% at the beginning of the year to 6.8% at the end of the year. The higher housing loan interest rate combined with the weaker housing affordability will have a negative impact on the real estate demand. It is expected that the US real estate end will further weaken, which will affect the export of domestic floor coverings.
On the other hand, from the perspective of the import sources of American flooring. From 2019 to 2021, the share of China's supply of goods decreased year by year. By 2021, the share of China's exports was gradually shared by Vietnam at around 73%. The share increased from around 0 in 2018 to 19.26% in June 2022, and the corresponding share of China's floor decreased by 61% from 87%. It is expected that Vietnam's exports will further compress the already sluggish export demand for floor covering products, and the export volume of floor covering products will further decline in 2023.
four
summary
The explosive export of PVC powder and its related products in the past two years may make up for the weak domestic demand at the demand side. According to the brief analysis of macroeconomic, real estate and export trends in the United States, it is estimated that the export volume of PVC powder and floor covering products will fall to different degrees in 2023 compared with the same period last year, and the demand side support for exports will gradually weaken.
